TESTIMONY
BY ANDREW F. KREPINEVICH, JR.
BEFORE THE HOUSE NATIONAL SECURITY COMMITTEE
SUBCOMMITTEES ON MILITARY PROCUREMENT AND RESEARCH AND DEVELOPMENT

OCTOBER 8, 1998

It is an honor to address these two Subcommittees
on the important issue of defense modernization. My name is Andrew Krepinevich, and I
serve as Executive Director of the Center for Strategic and Budgetary Assessments, a
nonpartisan, nonprofit public policy "think tank" committed to promoting
innovative thinking about defense planning and investment strategies. Prior to
joining CSBA, I served in the military for over twenty years. In my last assignment, in
the Pentagon's Office of Net Assessment, I wrote the Defense Department's first (and, to
my knowledge, only) comprehensive assessment of the military revolution. Recently, I
served as a member of the National Defense Panel.

My testimony centers on three issues relating to defense modernization:

What is the goal of our defense modernization
effort? Ideally, it will ensure that, as new capabilities are fielded, we are acting to
minimize the risks to our security over the long term by exploiting an emerging military
revolution.

What are the challenges for defense modernization?
At present, they seem to be twofold. First, our modernization strategy is far more
reflective of the passing era than the one in which we now find ourselves. Second, the
mismatch between what we are planning to spend on defense modernization, and the resources
we are currently projecting to fund it, is crowding out resources needed to sustain
transformation.

What are the characteristics of a modernization
strategy that would support the Defense Department's vision of a transformed U.S. military
able to meet the very different challenges that will emerge from the ongoing geopolitical
revolution and an emerging military revolution (the so-called "revolution in military
affairs")?

My principal concern is that we are not
implementing the changes in our approach to modernization that these revolutionary times
demand. While there appears to be a consensus among senior national security officials
that a military transformation is needed, it is not yet adequately reflected in our
modernization strategy or programs. For example, the QDR yielded three future U.S. force
"options" for consideration. But these options did not represent different U.S.
modernization programs; rather, they essentially offered the choice of executing
essentially the same modernization program at three different rates of change. It is a
modernization program that emphasizes the pre-transformation threat environment, while
according insufficient attention to what is likely to be a far more dangerous
post-transformation conflict environment.

Consequently, our modernization effort will produce a force that is likely to depreciate
rapidly over the next two decades, while its principal value will be realized during a
period of relatively low risk to the national security. If this occurs, the consequences
may be severe. At best, we would probably be forced to recapitalize the force, at great
expense. At worst, we could see our vital security interests placed in jeopardy. In short,
while the current modernization program likely suffers from a serious program-funding
mismatch, the primary problem with our approach to defense modernization is not, at its
core, budgetary in nature, it is strategic.

How Wisely Are We Investing? - Our Modernization Strategy

During recent testimony before the Senate Armed Services Committee, Defense Secretary
William Cohen declared, "I can sum up our vision to you in one word:
transformation." Indeed, since the Cold War's end, the objective of transforming the
U.S. military has increasingly gained currency. Both the Defense Department's Quadrennial
Defense Review (QDR), and the National Defense Panel (NDP), an independent body of
national security experts on which I served, declared transforming the military to be a
top priority. The Joint Chiefs of Staff declared in Joint Vision 2010 their intent to
"create the template to guide transformation . . . ."

There are two fundamental factors driving the need for transformation. The first is that,
over the next decade or two, our military will likely confront very different challenges
from those we faced during the Cold War or during the Gulf War. Potential adversaries have
strong incentives to present us with different military problems than did Saddam Hussein
during the Gulf War, and increasingly, with the diffusion of military technology, they
will have the capability to do so.

The need for a transformation strategy also is being stimulated by a growing awareness on
the part of a number of leading military organizations, ours included, that the world is
entering into a period of military revolution. This century has witnessed two such periods
of military revolution. The most recent is the nuclear weapon-ballistic missile revolution
of the 1940s and 1950s. An earlier revolution occurred in the 1920s and 1930s, and was
characterized by the transformation of warfare on land, which culminated in the
blitzkrieg; at sea, with the rise of naval aviation and carrier battle groups; and in the
air, with the emergence of strategic aerial bombardment. Such periods are characterized by
discontinuous leaps in military effectiveness, the result of an integration of new
military capabilities, doctrine, and organizations. With respect to modernization, there
are dramatic shifts in the military "tools" available to commanders: carriers
displace battleships, tanks displace horse cavalry. Moreover, entirely new capabilities
and corresponding new military operations arrive on the scene: the submarine and strategic
submarine blockade; bombers and strategic aerial bombardment; radar and intergrated air
defenses are but a few examples.

We must ask ourselves: what are the emerging and declining systems of this military
revolution? How do we ensure that the emerging dominant "sunrise systems" get
into the hands of our commanders? How to we avoid investing too early in promising new
systems that may quickly depreciate in effectiveness as the technologies on which they are
based continue to advance rapidly, or as the challenges to our security change? How do we
divest ourselves of declining "sunset" systems, or at least avoid locking
ourselves in to large quantity purchases of such systems, with their 30- or 40-year life
spans? How do we hedge against the uncertainty of not knowing which new systems will prove
decisive and which will decline in value?

These issues take on greater importance given that the Defense Department confronts this
era of transformational change with limited resources. There is the risk that if the wrong
transformation path is chosen for modernization (or if no attempt is made at
transformation), it will prove difficult, if not impossible, for the Pentagon to buy its
way out of its mistakes.

Moreover, it is important to begin the transformation process soon. It is no exaggeration
to say that, given the time it takes to field new military systems, develop new doctrine,
and field test new combat organizations, the U.S. military twenty years hence is already
being formed (and limited) by decisions being made today.

While there appears to be a consensus among senior national security officials that a
military transformation is needed, it is not yet adequately reflected in our modernization
strategy or programs. The United States' modernization effort remains predominantly
focused on improving its capabilities to conduct power-projection operations against a
threat similar to that which was encountered during the Persian Gulf War, both in terms of
scale and character.

In summary, rather than undertaking a military
transformation, we continue to pursue a modernization strategy that was set principally by
the momentum developed over forty years of Cold War with the Soviet Union, and that
severely discounts the revolutionary changes under way in the geopolitical environment and
in military-related technologies. The result is that the current defense program will
produce a slightly smaller, but similar U.S. military as compared to the one called for by
the QDR's proximate ancestors, the Clinton Administration Bottom-Up Review (BUR) force,
and the Bush Administration Base Force.

How ought we to think about modernization in a
period of transformational change? The first order of business is to get a sense of what
will characterize the post-transformation conflict environment, and the operational
challenges it will pose to the U.S. military. Only then is it possible to get a sense of
the optimal mix of military capabilities commanders will need to be effective in the
future. If the new operational challenges are not identified, the Defense Department may
persist in "baselining" its future requirements based on its Gulf War
experience. Indeed, much of the wargaming that supported both the 1993 Bottom-Up Review
and last year's QDR were oriented on "Desert Storm-like" contingencies in the
Persian Gulf and on the Korean Peninsula.

New Challenges: The Case of Power Projection and the "Anti-Access"
Challenge

Take the case of power-projection operations. Joint Vision 2010 states that "power
projection . . . will likely remain the fundamental strategic concept of our future
force." However, relying on experiences from a seven-year old conflict to determine
forces for future contingencies in a rapidly changing competitive environment seems
unlikely to provide the kind of insights needed for a modernization program to support
military transformation. The U.S. military's traditional method of deploying air and
ground forces at or through ports and airfields is almost certain to be invalidated by the
growing proliferation of national and commercial satellite services and missile
technology. National and commercial satellite services will allow even regional rogue
states to monitor U.S. deployments into forward bases, and (unless one makes heroic
assumptions regarding the effectiveness of missile defenses) hold them at risk through the
employment of large numbers of ballistic and cruise missiles. Senior U.S. military leaders
have already voiced strong concern over our ability to deal with such a contingency.
General Ronald Fogleman, then Air Force Chief of Staff, observed that

Saturation ballistic missile attacks against littoral forces, ports, airfields, storage
facilities, and staging areas could make it extremely costly to project U.S. forces into a
disputed theater, much less carry out operations to defeat a well-armed aggressor. Simply
the threat of such enemy missile attacks might deter U.S. and coalition partners form
responding to aggression in the first instance.

The Navy's Chief of Naval Operations, Admiral Jay Johnson, expressed very similar concerns
when he declared, "Over the past ten years, it has become evident that proliferating
weapon and information technologies will enable our foes to attack the ports and airfields
needed for the forward deployment of our land-based forces."

I anticipate that the next century will see those foes striving to target concentrations
of troops and materiel ashore and attack our forces at sea and in the air. This is more
than a sea-denial threat or a Navy problem. It is an area-denial threat whose defeat or
negation will become the single most crucial element in projecting and sustaining U.S.
military power where it is needed.

Perhaps most revealing, however, are the comments of a retired Indian brigadier general,
who observed that future access to forward bases

[I]s, by far the trickiest part of the American operational problem. This is the
proverbial "Achilles heel." India needs to study the vulnerabilities and create
covert bodies to develop plans and execute operations to degrade these facilities in the
run up to and after commencement of hostilities. Scope exists for low cost options to
significantly reduce the combat potential of forces operating from these facilities.

According to a recent study by the Defense Science Board, a regional power's development
of this kind of "anti-access" capability by 2010 is certainly plausible, even
given relatively severe resource constraints. Iran, for example, seems far more interested
in fielding "anti-access" systems, such as ballistic and cruise missiles,
anti-ship cruise missiles, submarines, and advanced antiship mines, than military systems
such as tanks and combat aircraft that proved largely ineffective for the Iraqis during
the Gulf War. Indeed, what Third World regime today is looking to create its own version
of the Republican Guard? Furthermore, a major power like China may not choose to increase
its military leverage in East Asia by aping the U.S. Navy's affinity for carrier battle
groups. Rather, Beijing might follow an asymmetric competitive path, developing an ability
to isolate Taiwan through long-range blockade forces comprising precision-guided ballistic
and cruise missiles, and close-range blockade forces centered around submarines and
advanced anti-ship mines.

Other Emerging Challenges

In its report to the Congress, the National Defense Panel identified several other new
operational challenges the U.S. military will likely encounter in a post-transformational
world. These challenges were derived from an examination of major geopolitical,
military-technical, demographic, and economic trends. They include:

Projecting power far inland;

Defending U.S. assets in space, and denying enemy
access to space;

Defending the U.S. homeland from nontraditional
forms of attack, to include irregular force use of weapons of mass destruction (WMD), and
attacks on the information infrastructure; and

Evicting enemy forces from, and controlling, urban
terrain.

Correspondingly, U.S. forces might seek to
exploit the potential of what may be new forms of military operations, to include
precision and electronic strike, information superiority, and space control.

A modernization strategy that supports military transformation must take into account the
fact that transformations typically take a decade and often closer to a score of years, to
play out. Indeed, today even those military systems that are placed on a "fast
track" for development and fielding often take ten years or more to reach forces in
the field. Considerable additional time is required to determine how best to employ new
military systems, and to make the appropriate force structure adjustments. Periods of
military revolution also are characterized by an increased risk of strategic surprise,
such as occurred, for instance, with submarine warfare early in this century, and which
might occur again with the onset of anti-access capabilities and competition in space.
Given these considerations, senior Defense Department leaders must begin now to develop
and execute a transformation strategy if the U.S. military is to be prepared for the very
different kinds of challenges they see confronting the armed forces over the long-term
future.

Finally, military revolutions typically find the effectiveness of certain military systems
in rapid decline. The displacement of the battleship by the aircraft carrier is but one
example. However, it is far from clear in advance which military systems, operational
concepts, or new force structures will work and which will not. Put another way, not only
will a transformation strategy need to be initiated soon, it also will have to take into
account military-technical uncertainty. How might a modernization strategy account for
this?

For a start, the military services will have to tap into rapidly advancing technologies to
develop new military systems that can be applied within the framework of new operational
concepts (e.g., long-range precision strike) executed by new kinds of military
organizations. It is this combination of technology, emerging military systems, new
operational concepts and force restructuring that often produces the discontinuous leap in
military effectiveness characteristic of military revolutions. Thus greater emphasis
should be placed on our R&D efforts in support of "wildcatting":
experimenting with a limited (but operationally significant) number of a wide variety of
military systems, operational concepts, and force structures, with the goal of identifying
those that are capable of solving emerging strategic and operational problems, or
exploiting opportunities, and of eliminating those which are not.

Wildcatting has been a hallmark of successful modernization transformation strategies. For
example, during the 19th century military transformation at sea from wooden ships powered
by sail to metal hulls and turbine engines among the 30 vessels of the Royal Navy that
were fit to take a place in the line of battle in 1870, there were three types of steam
engine, four screw arrangements, 16 varieties of armor protection, 18 hull models and no
fewer than 20 scales of armament. Similarly, during the rapid advances in aviation
technology that occurred in the 1920s and 1930s, the U.S. military developed and
flight-tested 12 medium and heavy bombers and nearly 70 attack, fighter and trainer
aircraft. None, however, were produced in great numbers.

This reveals a second element of a successful modernization strategy for transformation:
to avoid being "locked in." Lock-in occurs when limited resources are spent to
purchase a system in large numbers. The result is both a narrowing of options (as fewer
types of systems are procured), and a locking the force into the current state of
technological advancement. Resources that could have gone into an exploration of a wider
range of systems and sustaining continued advances in technology are locked into the
existing force. This may work well if we "guess right"; i.e., if the fielded
force serendipitously turns out to be the "right" force to meet the
post-transformation challenges, and if the rate of technological advance slows. If not, we
will have locked ourselves into a single-point solution in a very uncertain world. We will
have bought either the wrong systems or the "right" systems too soon - before
the rapidly advancing technologies that enable them have matured.

The U.S. Navy understood this well in the 1920s and 30s, during the transformation from a
battle fleet centered around battleships to one focussed on carrier battlegroups. It was
unclear whether naval aviation would be optimized by spreading it throughout the fleet
(e.g., having a few aircraft on every surface combatant), or concentrated on aircraft
carriers. Moreover, it was also unclear what kind of carrier would be optimal.
Consequently, the Navy created options for itself by wildcatting. It invested in three
classes of carriers, but only produced four carriers in all. It also experimented with
aircraft on carriers and on surface ships, and even tried working with dirigibles.

On the other hand, Britain's Royal Navy, which emerged from World War I with a dominant
lead in carrier aviation, chose to lock itself into existing technology by deploying
carriers. The result is that the Royal Navy had to absorb operations, maintenance and
personnel costs, which limited funding for R&D on naval aviation (which was
progressing rapidly), and on new carriers that might optimize the potential of air power
at sea. The result is that the Royal Navy carriers depreciated rapidly in effectiveness as
more powerful naval aircraft (requiring bigger carriers) came on the scene. The Royal Navy
also saw U.S. Navy and Imperial Japanese Navy, who entered the competition in naval
aviation at a much later date, become dominant in this new form of warfare.

Not only has wildcatting been an effective element of a modernization transformation
strategy within Services, but increasingly among them as well. For instance, the Army,
Navy and Air Force each had ballistic missile programs in the 1950s. The Air Force program
led, ultimately, to the Minuteman ICBM, a key element of the U.S. nuclear strike mission
force. The Army program was instrumental in the birth of the space program, and the Navy
program led to the Polaris submarine and the nuclear ballistic missile submarine force, a
cornerstone of U.S. nuclear deterrence.

The end result of each of these wildcatting efforts was the creation of strategic
"options" on a range of military capabilities. These options could be used both
to dissuade prospective competitors from resuming a high level of military competition
and, in the event dissuasion or deterrence failed, exercising those options to prevail in
the competition itself. It is important to note that creating such options involve a
defense budget "train wreck." Recall that the U.S. military developed the
foundation for strategic aerial bombardment, the carrier navy, modern amphibious warfare,
and mechanized air-land operations during the relatively lean budget years of the 1920s
and 1930s. What it does imply, however, is a different set of strategic priorities.

For example, take the case of the military meeting the "anti-access"
power-projection challenge. It is not yet clear how the military might address this
challenge. A solution may be found in Air Force long-range precision strike operations. Or
strikes from a Navy task force comprising a "distributed" capital ship (i.e.,
carriers, as well as arsenal ships and Trident "stealth battleships"--fitted
with hundreds of vertical launch systems for long-range PGMs--all linked by an expanded
version of the Navy's Cooperative Engagement Capability battle-management network and
Marine "infestation" forces) may be critical to defeating enemy anti-access
forces. Perhaps a critical role will be performed by highly networked, distributed Army
forces employing long-range missiles and weaponized unmanned aerial vehicles (UAVs). Or it
may be that a combination of these capabilities is needed to meet the challenge, or
perhaps something quite different. Our modernization strategy must provide for an
opportunity for the Services to experiment - alone and in combination - with a wide
variety of systems in an attempt to solve this problem before it emerges as a threat to
our interests.

Wildcatting is often informed by a vigorous level of field experimentation. Properly done,
such experimentation can help reduce uncertainty by determining what systems and forces
are best able to meet emerging operational challenges. Supporting experimentation and
innovation in a period of great change and uncertainty also implies a heightened tolerance
of honest failure. If a "no mistakes" approach to transformation is adopted, the
result will likely be a "smaller but similar" U.S. military, as strong
incentives will exist to deviate as little as possible from what is "proven" to
be effective in today's military. In effect, the misplaced desire to maximize efficiency
may well crowd out the innovation that will enable transformation. Due to a recent
agreement between Congress and senior DoD leaders, joint experimentation is now the
responsibility of the U.S. Atlantic Command. Atlantic Command will test our
transformational ability by conducting joint exercises oriented on emerging operational
challenges, and employing a range of new capabilities provided by new R&D innovations.

Having said this, what remains unclear, however, is how several of the major pillars of
the Defense Department's current modernization program will help the military meet
emerging operational challenges. If forward bases, ports and airfields are at high risk of
destruction or preemption early in a conflict, how will we safely deploy our relatively
short-range tactical air forces? Our heavy mechanized divisions? Will we be able to move
carriers through choke points like the Strait of Hormuz, or even the Taiwan Strait, at an
acceptable risk? Yet our modernization program calls for the military to spend tens - and
in some cases - hundreds of billions of dollars to deploy new tactical aircraft, upgrade
our tank fleet, and launch a new class of carriers.

There is a profound disconnect here. As our military leaders have told us, future
adversaries will almost certainly present us with a very different set of problems than we
confronted over seven years ago in the Persian Gulf. In pursuing the current modernization
strategy, we may be locking ourselves in to military capital stock that will depreciate
rapidly in value far in advance of its expected life cycle. At the same time, we are also
crowding out investment in wildcatting opportunities, such as going forward with the
arsenal ship and Trident conversion, fielding a dramatically different Army division,
exploring more fully the systems that could enable the Marine "Hunter Warrior"
concept, and facilitating the Air Force's transformation to a "space and air
force." In short, our current modernization strategy risks committing us in to
"single-point" solutions that assume away uncertainty, instead of investing in
options that hedge against it.

A transformation modernization strategy should also take into account the need to create
incentives for industry to support the military's efforts in this area. The recent
consolidation of the industry has actually reduced such motivations. Fewer competitors
means less competition, and hence, less innovation. Today, in the name of efficiency, the
Defense Department has attempted to settle on a relatively few number of systems, and
produce them in fairly large quantities, so as to minimize cost. Defense firms would have
strong incentives to lock in long production runs on these relatively few systems, thereby
guaranteeing a steady stream of revenue, and little to encourage wildcatting with their
own R&D funds to develop new military systems. A transformation modernization strategy
would place a higher priority on providing a wider range of systems to the "war
fighters." However, industry consolidation has made this a difficult proposition, and
it is not clear what approach to modernization might undo its more pernicious effects.

Finally, the history of military revolutions over the past two centuries indicates that
exploiting commercial sector technology is likely to play an important role in a
modernization transformation strategy. Commercial advances in steam engines helped
(literally) fuel the naval transformation of the nineteenth century. The rapid rate of
technological growth in aviation, radio and mechanization in the commercial sector during
the interwar years helped underwrite a transformation in war. Joint Vision 2010 declares
that "the emerging importance of information superiority will dramatically impact how
well our armed forces can perform its [sic] duties in 2010." Consequently, a
modernization strategy for transformation will have to exploit the rapid advances that are
being made in the commercial sector in information technologies.

This should not be surprising. Each military transformation over the last hundred years or
so has seen a corresponding transformation of the defense industrial base, as new firms
with new skills have entered the field (much as new military systems and new military
organizations characterize transformation).

Moreover, any transformation modernization strategy also should explore how we might tap
into the "dual-use" capabilities being created in the commercial sector. For
example, armies of the mid-nineteenth century exploited the commercial sector's
construction of railroad and telegraph networks to boost their effectiveness. So, too,
should we consider how we might best exploit the "information railroad" being
put into space, the fiber optic networks being created on earth, and the "armor
plating" being developed by the commercial sector to defend their information assets,
among other things.

A core competence of our transformation modernization strategy will be our ability to
dominate time-based competition. With the technologies that underwrite transformation
being far more broadly available than those that supported the nuclear transformation
(i.e., nuclear weapons and ballistic missiles), the ability to translate technologies into
military capabilities more rapidly than our enemies will likely be increasingly important.
Moreover, with geopolitical and military-technical uncertainty being so high, we may have
relatively little warning of the appearance of post-transformational operational
challenges. The more our transformation modernization strategy allows us to avoid
"lock in," the more wildcatting we do to create an array of "options"
and the more innovative our defense industrial sector, the greater will be our ability to
meet the post-transformation threats to our security.

To be sure, a transformation modernization strategy will require additional funding. The
National Defense Panel, in advocating a transformation strategy, called for $5-10 billion
a year to begin the process. Of course, some of this funding might be offset if the
Defense Department avoids prematurely locking in to serial production of new systems (save
in those instances where such systems offer a true "leap ahead" improvement in
military effectiveness), and as military system candidates for "divestiture" are
identified. To date, however, promising new capabilities are being put on the "back
burner" or, worse yet, cancelled, in an attempt to preserve a modernization strategy
that cannot likely be sustained without a major increase in funding, and could fail
precipitously when the post-transformation challenges appear.

Budgetary Issues: The Modernization-Funding Mismatch

Over the long term, the cost of the plan outlined in the 1997 Quadrennial Defense Review
(QDR) and confirmed in this year's budget request is likely to substantially exceed the
$260 billion a year budget for the Department of Defense (DoD) assumed in the QDR.
Specifically, CSBA estimates that, during the ten years following the FY 1999-FY 2003
Future Years Defense Program (FYDP), the cost of DoD's plan is likely to exceed this
assumed long-term funding level by over $25 billion a year. The principal causes of this
plans/funding mismatch include:

the projected entrance into production of a broad
range of new weapon systems, including the F-22, F/A-18E/F, Joint Strike Fighter (JSF),
New Attack Submarine (NSSN), DD-21 surface combatant, and Comanche helicopter;

the fact that many of these new weapon systems
will cost twice as much or more to procure than the systems they are replacing; and

the likelihood that, as has been true
historically, DoD's operations and support (O&S) costs will prove to be significantly
higher than currently anticipated.

CSBA projects that the bulk of this $25 billion
funding shortfall will result from higher than anticipated procurement costs. However, I
would like to note that the recently reported negative trends in various readiness
indicators, including recruitment, retention, and equipment maintenance and repair,
suggest that future O&S costs may exceed DoD's existing estimates by even more than we
assumed in our analysis. Moreover, it is important to remember that whether cost growth
occurs in procurement, O&S, or even research and development, the effect on new
weapons programs could be the same: further pressure to either scale back modernization
plans, or add more money to the defense budget.

CSBA used two different methodologies to estimate the cost of the administration's
long-term procurement plans: one is based on relatively optimistic assumptions concerning
future costs, while the other is based on relatively pessimistic assumptions more
consistent with historical experience. Because the latter estimate is far more consistent
with past examples, CSBA believes that it serves as a far better basis for planning.

An Optimistic Scenario: Employing optimistic assumptions, CSBA estimates that DoD's
current modernization plans will require about $59 billion a year in procurement funding
over the FY 2004-FY 2013 period. This is the same level of funding DoD is projected to
reach in FY 2003 according to the most recent FYDP. It is also close to the $60 billion
figure that, since 1995, various DoD officials have pointed to as the long-term goal for
procurement.

A Pessimistic Scenario: Applying a more pessimistic, but historically consistent,
methodology, CSBA estimates that DoD's current modernization plans will require
procurement funding of about $80 billion a year over the FY 2004-FY 2013 period. CSBA
estimates that procurement costs will grow substantially in the years beyond the FYDP,
both because DoD's procurement plans are projected to become more ambitious and because,
under this methodology, CSBA assumes that, consistent with past experience, new weapon
systems will cost significantly more to produce than DoD currently anticipates.

As noted earlier, of the two possibilities, we believe that this second, higher estimate
of future procurement costs provides a much sounder basis for planning. It may also,
however, suggest that DoD's current plans for weapons modernization are excessive. Without
question, DoD needs to substantially increase funding for procurement if it is to sustain
a force structure of 1.36 million troops over the long run, as envisioned in current
plans. But at $80 billion a year, DoD would be spending about $59,000 per troop on
procurement. That is about 40 percent more per troop than DoD spent on average during the
1970s and 1980s. This may be significantly more than is necessary to keep U.S. forces
adequately equipped.

In summary, our view at CSBA is that some growth in procurement funding will likely be
necessary over the long run. However, Congress needs to ensure that we are buying the
right kinds of weapon systems, at the right time, rather than simply attempting to
generate large increases in the procurement budget.

Conclusion

The United States military today has a commanding advantage in military capability. But in
a period of great geopolitical and military-technical change and uncertainty, it is far
from clear that this advantage will be sustained over the long term. If, as seems likely,
we are in the early stages of a military revolution, it will yield both new challenges for
the U.S. military, and new opportunities as well. Meeting these challenges and exploiting
these opportunities in a resource constrained environment will require, among other
things, the development of a transformation modernization strategy that reflects the new
competitive environment in which we now find ourselves.

Such a strategy needs to be formulated promptly. First, because transformation typically
takes a decade or more to realize. We are in a race against time to build a
post-transformation military before we must confront the new challenges stemming from the
geopolitical and military-technical revolutions. Second, because continuing down the
current modernization path runs a high risk of wasting scarce defense dollars that are
needed to support transformation. It is time to put our dollars where our vision is.

Transformation can be defined as innovation on a scale sufficient to effect a military
revolution. Yet it is interesting that the Defense Department has not, to my knowledge,
defined the term "transformation." A military revolution can be defined as a
fundamental shift in the character of the military competition that is stimulated by a
sharp increase in the quantitative (i.e., human or fiscal) or qualitative (e.g.,
technological) inputs available to military organizations, which, when combined with
innovative operational concepts and associated new force elements, produces a
discontinuous leap in military effectiveness, typically of an order of magnitude or
greater.

Unless otherwise noted, all figures are expressed
in FY 1999 dollars.

For a discussion of the methodologies employed in
arriving at these estimates, see Steven Kosiak, Cost of Defense Plan Could Exceed
Available Funding By $26 Billion A Year Over Long Run (Washington, D.C.: Center for
Strategic and Budgetary Assessments, April 2, 1998).